新思科技Synopsys (SNPS) 2023年10-K年度報告「NASDAQ」.pdf

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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended October 31,2023ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCH

2、ANGE ACTOF 1934For the transition period from to Commission File Number 0-19807 SYNOPSYS,INC.(Exact name of registrant as specified in its charter)Delaware56-1546236(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)675 Almanor Avenue94085Sunnyvale,Califor

3、nia(Address of principal executive offices)(Zip Code)(650)584-5000(Registrants telephone number,including area code)Securities Registered Pursuant to Section 12(b)of the Act:Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which RegisteredCommon Stock(par value of$0.01 per share)SNPSNasd

4、aq Global Select MarketSecurities Registered Pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Secti

5、on 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding12 months(or for such shorter period that the registrant was required to file such repor

6、ts),and(2)has been subject to such filing requirements for the past90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 ofthis chapter)during the preceding 12 mont

7、hs(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of“large a

8、ccelerated filer,”“accelerated filer,”“smaller reporting company,”and emerging growth company in Rule 12b-2 of the Exchange Act.Table of ContentsLarge accelerated filer Accelerated Filer Non-accelerated filer Smaller reporting company Emerging growth companyIf an emerging growth company,indicate by

9、check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its mana

10、gements assessment of the effectiveness of itsinternal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accountingfirm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indi

11、cate by check mark whether the financial statements of the registrant included in the filing reflect the correction ofan error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based

12、 compensation received by any of the registrantsexecutive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No The aggregate market value of the voting and non-voting common

13、equity held by non-affiliates computed by reference to the price at which the common equity was last sold as ofthe last business day of the registrants most recently completed second fiscal quarter was approximately$46.4 billion.Aggregate market value excludes an aggregate ofapproximately 27.3 milli

14、on shares of the registrants common stock,par value of$0.01 per share(Common Stock)held by the registrants executive officers and directors and byeach person known by the registrant to own 5%or more of the outstanding common stock on such date.Exclusion of shares held by any of these persons should

15、not be construedto indicate that such person possesses the power,direct or indirect,to direct or cause the direction of the management or policies of the registrant,or that such person is controlledby or under common control with the registrant.On December 6,2023,151,986,878 shares of Common Stock w

16、ere outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrants definitive Proxy Statement relating to the registrants 2024 Annual Meeting of Stockholders,scheduled to be held on April 10,2024,are incorporated byreference into Part III of this Annual Report on Form 10-K where indicate

17、d.Except as expressly incorporated by reference,the registrants Proxy Statement shall not be deemed tobe part of this report.Table of ContentsSYNOPSYS,INC.ANNUAL REPORT ON FORM 10-KFiscal year ended October 31,2023TABLE OF CONTENTS Page No.PART I Item 1.Business 3Item 1A.Risk Factors16Item 1B.Unreso

18、lved Staff Comments30Item 1C.Cybersecurity30Item 2.Properties30Item 3.Legal Proceedings31Item 4.Mine Safety Disclosures32PART II Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases ofEquity Securities33Item 6.Reserved34Item 7.Managements Discussion and Analys

19、is of Financial Condition and Results of Operations35Item 7A.Quantitative and Qualitative Disclosures About Market Risk47Item 8.Financial Statements and Supplementary Data50Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure98Item 9A.Controls and Procedures98I

20、tem 9B.Other Information99Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections99PART III Item 10.Directors,Executive Officers and Corporate Governance100Item 11.Executive Compensation100Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockhol

21、derMatters100Item 13.Certain Relationships and Related Transactions,and Director Independence100Item 14.Principal Accountant Fees and Services100PART IV Item 15.Exhibits and Financial Statement Schedules101SIGNATURES104iTable of ContentsCautionary Note Regarding Forward-Looking StatementsThis Annual

22、 Report on Form 10-K(this Form 10-K or the Annual Report)contains forward-looking statements within the meaning of Section 27Aof the Securities Act of 1933,as amended(the Securities Act),Section 21E of the Securities Exchange Act of 1934,as amended(the ExchangeAct),and the Private Securities Litigat

23、ion Reform Act of 1995.Any statements herein that are not statements of historical fact are forward-lookingstatements.Words such as“may,”“will,”“could,”“would,”“can,”“should,”“anticipate,”“expect,”“intend,”“believe,”“estimate,”“project,”“continue,”“forecast,”“likely,”“potential,”“seek,”or the negati

24、ves of such terms and similar expressions are intended to identify forward-lookingstatements.This Form 10-K includes,among others,forward-looking statements regarding:our business,product and platform strategies and business outlook;the impact of macroeconomic conditions,increased global inflationar

25、y pressures and interest rates,potential economicslowdowns or recessions,legislative developments,trade disruptions,including export control restrictions,geopolitical pressuresand conflicts,supply chain disruptions and fluctuations in foreign exchange rates on our business and our customersbusinesse

26、s;the exploration of strategic alternatives for our Software Integrity segment;regulatory changes in the United States and other regions in which we operate;demand for our products and our customers products;the expected realization of our contracted but unsatisfied or partially unsatisfied performa

27、nce obligations(backlog);customer license renewals;our ability to successfully compete in the markets in which we serve;our license mix,business model and variability in our revenue;the continuation of current industry trends towards customer and vendor consolidation,and the impact of such consolida

28、tion;prior and future acquisitions,including the expected benefits and risks of completed acquisitions;the completion of development of our unfinished products,or further development or integration of our existing products;technological trends in integrated circuit design;the status of litigation an

29、d/or regulatory investigations;our ability to protect our intellectual property;our ability to attract and retain senior management and key employees worldwide;the impact of tax laws and changes in such laws on our business;our cash,cash equivalents and cash generated from operations;andour future l

30、iquidity requirements.These statements are based on our current expectations about future events and involve certain known and unknown risks,uncertainties andother factors that could cause our actual results,time frames or achievements to differ materially from those expressed or implied in our forw

31、ard-looking statements.Accordingly,we caution readers not to place undue reliance on these statements.Such risks and uncertainties include,among others,those listed in Part I,Item 1A,Risk Factors and Item 3,Legal Proceedings;and Part II,Item 7,Managements Discussion andAnalysis of Financial Conditio

32、n and Results of Operations,Item 7A,Quantitative and Qualitative Disclosures About Market Risk and Item 9A,Controls and Procedures of this Annual Report on Form 10-K.The information included herein represents our estimates and assumptions as ofthe date of this filing.Unless required by law,we undert

33、ake no obligation to update publicly any forward-looking statements,or to update thereasons actual results could differ materially from those anticipated in these forward-looking statements,even if new information becomesavailable in1Table of Contentsthe future.All subsequent written or oral forward

34、-looking statements attributable to Synopsys,Inc.or persons acting on our behalf are expresslyqualified in their entirety by these cautionary statements.Readers are urged to carefully review and consider the various disclosures made in thisreport and in other documents we file from time to time with

35、 the Securities and Exchange Commission(SEC)that attempt to advise interestedparties of the risks and factors that may affect our business.Fiscal Year EndOur fiscal year ends on the Saturday nearest to October 31 and consists of 52 weeks,with the exception that approximately every five years,wehave

36、a 53-week year.When a 53-week year occurs,we include the additional week in the first quarter to realign fiscal quarters with calendarquarters.Fiscal 2023,2022 and 2021 were 52-week years and ended on October 28,2023,October 29,2022,and October 30,2021,respectively.Fiscal 2024 will be a 53-week year

37、.For presentation purposes,this Annual Report on Form 10-K refers to the closest calendar month end.2Table of ContentsPART I Item 1.BusinessCompany and Segment OverviewSynopsys,Inc.(Synopsys,we,our or us)provides products and services used across the entire Silicon to Software spectrum to bring Smar

38、tEverything to life.From engineers creating advanced semiconductors to product teams developing advanced electronic systems to softwaredevelopers seeking to ensure the security and quality of their code,our customers trust that our technologies will enable them to meet newrequirements for energy eff

39、iciency,reliability,mobility,security and more.We are a global leader in supplying the electronic design automation(EDA)software that engineers use to design and test integrated circuits(ICs),also known as chips or silicon.We provide software and hardware used to validate the electronic systems that

40、 incorporate chips and thesoftware that runs on them,including cloud-based digital design flow to boost chip-design development productivity.We also provide technicalservices and support to help our customers develop advanced chips and electronic systems.These products and services are part of our D

41、esignAutomation segment.We also offer a broad and comprehensive portfolio of semiconductor intellectual property(IP)products,which are pre-designed circuits thatengineers use as components of larger chip designs rather than designing those circuits themselves.These products and services are part ofo

42、ur Design IP segment.We are also a leading provider of software tools and services that improve the security,quality and compliance of software in a wide variety ofindustries,including electronics,financial services,automotive,medicine,energy and industrials.These tools and services are part of ourS

43、oftware Integrity segment.Corporate InformationWe incorporated in 1986 in North Carolina and reincorporated in 1987 in Delaware.Our headquarters are located at 675 Almanor Avenue,Sunnyvale,California 94085,and our headquarters telephone number is(650)584-5000.Our website is https:/ haveapproximately

44、 122 offices worldwide.Our Annual Report on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K,Proxy Statements,including those relating toour Annual Meeting of Stockholders,and any amendments to such reports or other information filed or furnished pursuant to Section 13(a)or15(d)o

45、f the Exchange Act are available through the Investor Relations page of our website(https:/ of charge as soon as reasonably practicable after we file them with,or furnish themto,the SEC(www.sec.gov).We use our Investor Relations page as a routine channel for distribution of important information,inc

46、luding,amongother things,news releases,investor presentations and financial information and to comply with our disclosure obligations under Regulation FairDisclosure.The contents of our website are not part of this Annual Report on Form 10-K and shall not be deemed incorporated by reference.Backgrou

47、ndIn this era of Smart Everything,we have seen a remarkable proliferation of consumer and wireless electronic products,particularly mobiledevices.The growth of the Internet and cloud computing has provided people with new ways to create,store,and share information.At the sametime,the increasing use

48、of electronics in cars,buildings,appliances,and other consumer products is creating a connected landscape of smartdevices.Numerous software applications have been developed to expand the potential of these connected devices.The increasing impact ofartificial intelligence(AI)and machine learning is d

49、riving an increase in the activity of new and existing chip and system design companiesaround the world.These developments have been enabled by innovation in the semiconductor and software industries.It is now common for a single chip tocombine many components(processor,communications,memory,custom

50、logic,input/output)and embedded software into a single system-on-chip(SoC),necessitating highly complex chip designs.The most complex chips today contain more than a billion transistors.Transistors are thebasic building blocks for ICs,each of which may have features that are less than 1/1,000th the

51、diameter of a human hair.These devices are manufactured using masks to direct beams of light onto a wafer of silicon.At such small dimensions,the wavelength of lightitself can become an obstacle to production,proving too big to create such3Table of Contentsdense features and requiring creative and c

52、omplicated new approaches.Designers have turned to new manufacturing techniques to solve theseproblems,such as multiple-patterning lithography,FinFET 3D transistors and Gate-All-Around Field-Effect transistor structures,which in turnhave introduced new challenges to design and production.The popular

53、ity of mobile devices and other electronic products has increased demand for chips and systems with greater functionality andperformance,reduced size,and lower power consumption.Our customers,who design those products,are facing intense pressure to deliverinnovative offerings in shorter timeframes a

54、nd at lower prices.In other words,innovation in chip and systems design often hinges on providingproducts“better,”“sooner,”and“cheaper”than competitors.The design of these chips and systems is extremely complex and necessitates state-of-the-art solutions.Over the past several years,market verticals

55、including AI,5G,automotive and cloud computing infrastructure havecontributed to the ongoing demand for our products and services.A similar dynamic is at work in the software arena,whether the software is embedded on a chip or used in other applications.The pace ofinnovation often requires developer

56、s to deliver more secure,high-quality software,which can include millions of lines of code,in increasinglyfrequent release cycles.Bugs,defects and security vulnerabilities in code can be difficult to detect and expensive to fix.Despite thesechallenges,it is crucial to have high-quality,secure code t

57、o ensure consumers privacy and safety,especially at a time when software is critical inmany industries across a growing array of smart devices.Our RoleAs the Silicon to Software PartnerSynopsys Silicon to Software technologies and services are designed to help our customerschip and system engineers

58、and softwaredevelopersspeed up time to market,achieve the highest quality of results,mitigate risk,and maximize profitability.Chip and systems designers must determine how best to design,locate and connect the building blocks of chips,and to verify that the resultingdesign behaves as intended and ca

59、n be manufactured efficiently and cost-effectively.This is a complex,multi-step process that is expensive andtime-consuming.Our wide range of products help at different steps in the overall design process,from the design of individual ICs to the designof larger systems.Our products increase designer

60、 productivity and efficiency by automating tasks,keeping track of large amounts of data,adding intelligence to the design process,facilitating reuse of past designs and reducing errors.Our IP products offer proven,high-quality pre-configured circuits that are ready to use in a chip design,saving cus

61、tomers time and enabling them to direct resources to features thatdifferentiate their products.Our global service and support engineers provide expert technical support and design assistance to our customers.Software developers are responsible for writing code that not only accomplishes its goals as

62、 efficiently as possible but also runs securely and isfree of defects.We offer products that can help developers write higher quality,more secure code by analyzing code for quality defects andknown security vulnerabilities,adding intelligence and automation to the software testing process,and helpin

63、g to eliminate defects in asystematic manner.As developers make use of open source software in their code,our products can help developers better manage thecomposition and security of the code.Our products enable software developers to catch flaws earlier in the development cycle,when they areless c

64、ostly to fix.Products and ServicesDesign Automation SegmentOur Design Automation segment includes the EDA and Other revenue groups.EDADesigning ICs involves many complex steps,including,among others architecture definition,register transfer level(RTL)design,functional/RTLverification,logic design or

65、 synthesis,gate-level verification,floorplanning,place and route,and physical verification.Designers use our EDAproducts to automate the IC design process,reduce errors and enable more powerful and robust designs.As the availability and amount of cloud-based data storage grows,customer interest in a

66、ccessing EDA on the cloud is also increasing ascustomers seek to benefit from the scalability and flexibility that cloud computing can offer to their flows and engineering teams.While many ofour solutions have been used in cloud-based environments for years,such as in a customers own server and/or c

67、loud environment,in fiscal2022 we launched a Synopsys Cloud4Table of Contentsoffering that provides customers additional options for accessing our EDA products in their own cloud environments and in the industrys firstEDA Software-as-a-Service solution developed in partnership with Microsoft Azure.O

68、ur solutions comprehensively address the design process,featuring a large number of EDA products that generally fall into the followingcategories:Digital and custom IC design and field programmable gate array(FPGA)design,which includes software tools to design,verify,implement and prepare an IC for

69、manufacturing;Verification,which includes technology to verify that an IC design behaves as intended;Manufacturing,which includes products that both enable early manufacturing process development and convert IC designlayouts into the masks used to manufacture the chips;andAI driven EDA solutions,whi

70、ch include AI and machine learning tools to complement our EDA software stack.Digital and Custom IC DesignOur Digital Design Family provides customers with a comprehensive digital design implementation solution that includes industry-leadingproducts and redefines conventional design tool boundaries

71、to deliver a more integrated flow than ever before,with better quality and time toresults.The platform gives designers the flexibility to integrate internally developed tools as well as those from third parties.With innovativetechnologies,a common foundation,and flexibility,our Digital Design Family

72、 helps reduce design times,decrease uncertainties in design steps,and minimize the risks inherent in advanced,complex IC design.The platform supports multiple technology nodes,including advanced nodes at12nm,10nm,8/7nm,6 nm,5/4nm,and 3nm,with technology collaborations on next-generation process tech

73、nologies.Key design products are available as part of the Digital Design Family and include Fusion Compiler RTL to GDSII design implementation,DesignCompiler logic synthesis,IC Compiler II physical design,Synopsys TestMAX test and diagnosis,PrimeTime static timing analysis,StarRCparasitic extraction

74、,IC Validator physical verification and 3DIC Compiler,the industrys first next-generation chip packaging solution,aimed atenabling customers to combine or stack multiple dice on a single chip.Many of our EDA solutions are bolstered by AI and machine learningcapabilities.In addition,we offer Synopsys

75、.ai,the first product in the market that brings AI to the entire design process.This groundbreakingsolution handles design complexity and takes over repetitive tasks such as design space exploration,verification coverage and regressionanalytics,as well as test program generation,while helping to opt

76、imize power,performance,and area.This frees up engineers to focus on chipquality and differentiation and enables them to quickly migrate their chip designs from foundry to foundry or from process node to process node.Our Custom Design Family is a unified suite of design and verification tools that a

77、ccelerates the transistor-level design of robust analog,mixed-signal,and custom-digital ICs.The platform features visually assisted layout automation,high-performance circuit simulation,reliability-awareverification,and natively integrated StarRC extraction and physical verification.This product fam

78、ily includes Custom Compiler layout andschematic editor,StarRC parasitic extraction,IC Validator physical verification and PrimeSim.The PrimeSim solution integrates PrimeSimSPICE,PrimeSim HSPICE,PrimeSim Pro and PrimeSim XA.The PrimeWave design environment is also included and provides comprehensive

79、analysis and improved productivity and ease of use across all tools in PrimeSim.Our Silicon Lifecycle Management(SLM)Family is a data analytics-driven platform that uses in-chip monitoring and sensing to optimize allphases of the silicon lifecyclefrom design and manufacturing to in-field deployment

80、and maintenance.The solution is integrated with the DigitalDesign Family for design calibration and analytics and includes Yield Explorer for product ramp analytics,SiliconDash for test and productionanalytics,TestMAX ALE(adaptive learning engine)for intelligent data extraction and communication to

81、the SLM database and DesignWare PVTIP for in-chip monitoring and sensing.FPGA DesignFPGAs are complex chips that can be customized or programmed to perform a specific function after they are manufactured.For FPGA design,we offer Synplify implementation software.TM5Table of ContentsVerificationOur Ve

82、rification Family is built from our industry-leading verification technologies,providing virtual prototyping,static and formal verification,simulation,emulation,FPGA-based prototyping,and debug in a unified environment with verification IP,planning,and coverage technology.Byproviding consistent comp

83、ile,runtime and debug environments across the flow of verification tasks and by enabling seamless transitions acrossfunctions,the platform helps our customers accelerate chip verification,bring up software earlier,and get to market sooner with advanced SoCs.The individual products and solutions incl

84、uded in the Verification Family include the following:VC SpyGlass family of static verification technologies including lint,CDC(clock domain crossing),RDC(reset domain crossing),Constraint Checking,Synopsys TestMAX Advisor,and low-power analysis and verification;VCS functional verification solution,

85、our comprehensive RTL and gate-level simulation technology,including Fine-GrainedParallelism;Verdi automated debug system,the industrys most comprehensive SoC debug;VC Formal,our next-generation formal verification product;ZeBu emulation systems,which use high-performance hardware to emulate SoC des

86、igns so that designers can acceleratehardware,software and power verification of large complex SoCs and perform earlier verification and optimization of the SoCtogether with software;HAPS FPGA-based prototyping systems,which are integrated and scalable hardware-software solutions for early softwared

87、evelopment and faster time to market;Virtualizer virtual prototyping solution,which addresses the increasing development challenges associated with software-richsemiconductor and electronic products by accelerating both the development and deployment of virtual prototypes;andPlatform Architect solut

88、ion,which provides for early analysis and optimization of multi-core SoC architectures for performanceand power;andOther principal individual verification solutions,including the PrimeSim solution and the PrimeWave design environment.ManufacturingOur manufacturing solutions include Sentaurus technol

89、ogy computer-aided design device and process simulation products,Proteus masksynthesis tools,CATS mask data preparation software,Yield Explorer Odyssey,Yield-Manager yield management solutions andQuantumATK atomic-scale modeling software.We also provide consulting and design services that address al

90、l phases of the SoC development process,as well as a broad range of experttraining and workshops on our latest tools and methodologies.AI Driven EDA StackOur EDA software stack spanning design,verification,and manufacturing is augmented with AI and machine learning through our Synopsys.aisuite of co

91、mplementary solutions.Starting in design with design space optimization that autonomously learns through quickly exploring potentialdesign alternatives,enabling engineers to develop superior design outcomes with significantly reduced effort as well as learning-based designretargeting to derivative p

92、rocesses,improved test coverage through AI-driven models while reducing test vectors and tester time,and analysis ofsilicon performance and quality that is leveraged for optimizing next-generation revisions of design.The Synopsys.ai solutions include:DSO.ai Design Space Optimization for best quality

93、 of results and productivity with scaling of exploration design workflows;6Table of ContentsVSO.ai Verification Space Optimization for improved functional verification coverage&faster turnaround time;TSO.ai Test Space Optimization for reduced pattern count,turnaround time and higher coverage;ASO.ai

94、Analog Space Optimization for analog layout optimization&migration;Design.da Design data analytics for actionable insights to unlock untapped power,performance,and area;Silicon.da Silicon data analytics for root-cause analysis and part-level traceability of failures;andFab.da Manufacturing data anal

95、ytics for improved process control,time-to-market,and user productivity.OtherOur Other product group includes revenue from sales of products to university programs as well as our optical products,mechatronic simulation,and the impact of gains and losses from foreign currency hedges.Design IP Segment

96、Our Design IP segment includes our Design IP products,which service companies primarily in the semiconductor and electronics industry.Design IP ProductsAs more functionality converges into a single chip or even a multi-die system,the number of third-party IP blocks incorporated into designs israpidl

97、y increasing.We provide the broadest,most comprehensive portfolio of high-quality,silicon-proven IP solutions for SoCs.Our broadSynopsys IP portfolio includes:High-quality solutions for widely used wired and wireless interfaces such as USB,PCI Express,DDR,Ethernet,MIPI,HDMI,andBluetooth Low Energy;L

98、ogic libraries and embedded memories,including memory compilers,non-volatile memory,and standard cells with integratedtest and repair;Processor solutions,including configurable ARC processors,Neural Network processors,Digital Signal Processor cores,andsoftware and application-specific instruction-se

99、t processor tools for embedded applications;Security IP solutions,including cryptographic cores and software,security subsystems,platform security and secured interfaceIP;An industry-leading IP offering for the automotive market,optimized for strict functional safety and reliability standards such a

100、sISO 26262;andSoC infrastructure IP,datapath and building block IP,mathematical and floating-point components,Arm AMBA interconnectfabric and peripherals,and verification IP.Our IP Accelerated initiative augments our established,broad portfolio of silicon-proven Synopsys IP with IP Prototyping Kits

101、and customized IPsubsystems to accelerate prototyping,software development,and integration of IP into SoCs.We offer a broad portfolio of IP that has been optimized to address specific application requirements for the mobile,automotive,digital home,Internet of things,and cloud computing markets,enabl

102、ing designers to quickly develop SoCs in these areas.Software Integrity SegmentOur Software Integrity segment helps organizations align people,processes and technology to intelligently address software risks across theirportfolio and at all stages of the application lifecycle.The testing tools,servi

103、ces,and programs enable our customers to manage open sourcelicense compliance and detect,prioritize,and remediate security vulnerabilities and defects across their entire software development lifecycle.Our offerings include security7Table of Contentsand quality testing products,managed services,prog

104、rams and professional services,and training offered as on-premises and cloud-baseddelivery.The Polaris Software Integrity Platform is designed to bring our products and services together into an integrated,easy-to-use solution thatenables security and development teams to build secure,high-quality s

105、oftware faster.Key offerings in this space include:Intelligent Orchestration solution,which enables DevOps to build a testing pipeline that enables a company to definewithin itsparticular policy guidelinesthe rules to determine which tests to run,including the Synopsys portfolio tests,third partypro

106、ducts,or open source tests;Software Risk Manager,which correlates and prioritizes findings from the Synopsys portfolio,third party products,and opensource tools,providing a comprehensive view of software security risk;Coverity static analysis tools,which analyze software code to find crash-causing b

107、ugs,incorrect program behavior,the latestsecurity vulnerabilities,memory leaks and other performance-degrading flaws;Black Duck software composition analysis tools,which scan binary and source code for license and compliance issues andother known security vulnerabilities stemming from incorporated t

108、hird-party and open source code;WhiteHat Dynamic,our latest dynamic application security testing solution,which rapidly and accurately finds vulnerabilities inwebsites and applications;Seeker IAST tool,which identifies exploitable security vulnerabilities while web applications are running,thereby v

109、erifyingresults and eliminating false positives;andDefensics fuzz testing tools,which examine security vulnerabilities in software binaries and libraries,particularly networkprotocols and file formats,by systematically sending invalid or unexpected inputs to the system under test.Managed services al

110、low developers to test code across many dimensions,and to rapidly respond to changing testing requirements and evolvingthreats.This includes mobile application security testing services to find vulnerabilities in mobile applications as well as dynamic applicationsecurity testing services,which ident

111、ify security vulnerabilities while web applications are running,without the need for source code.Programs and professional services address unique security and quality needs with specialized consulting by skilled experts,including theBuilding Security in Maturity Mode,which measures the effectivenes

112、s of software security initiatives by assessing the current state as comparedto industry benchmarks,and the Black Duck on demand audit services,which provides open source compliance and software vulnerabilityassessments as part of the due diligence process for mergers and acquisitions.Finally,traini

113、ng includes eLearning and instructor-led training that prepares developers and security professionals to build security and qualityinto their software development process and remediate found vulnerabilities and defects.Customer Service and Technical SupportA high level of customer service and suppor

114、t is critical to the adoption and successful use of our products.We provide technical support for ourproducts through application engineering teams.Post-contract customer support includes providing frequent updates to maintain the utilization of the software due to rapid changes intechnology.In our

115、Design Automation and Design IP segments,post-contract customer support for our EDA and IP products also includesaccess to the SolvNet Plus portal,where customers can explore our complete design knowledge database,get self-help and get support.Updated regularly,the SolvNet Plus portal includes techn

116、ical documentation,design tips and answers to user questions.Customers can alsoengage,for additional charges,with our worldwide network of applications consultants for additional support needs.In our Software Integrity segment,post-contract customer support for our products includes access to our su

117、pport community portal,wherecustomers can access our product documentation,self-service training materials,customer forums and our product knowledge base.Customerscan also raise support tickets,request replacement license keys and validate the terms of their active license keys through the portal.Ou

118、rsupport community portal is8Table of Contentsfrequently updated with new and supplemental materials on a variety of topics.Customers may engage dedicated support engineers for anadditional charge.In addition,we offer training workshops designed to increase customer design proficiency and productivi

119、ty with our products.Workshops coverour EDA products and methodologies used in our design and verification flows,as well as specialized modules addressing systems design,logicdesign,physical design,simulation and testing.We offer regularly scheduled public and private courses in a variety of locatio

120、ns worldwide,aswell as online training(live or on-demand)through our Virtual Classrooms.Product WarrantiesWe generally warrant our products to be free from defects in media and to substantially conform to material specifications for a period of 90 daysfor our software products and for up to six mont

121、hs for our hardware products.In certain cases,we also provide our customers with limitedindemnification with respect to claims that their use of our software products infringes on patents,copyrights,trademarks or trade secrets.Wehave not experienced material warranty or indemnity claims to date.Supp

122、ort for Industry StandardsWe actively create and support standards that help our EDA and IP customers increase productivity,facilitate efficient design flows,improveinteroperability of tools from different vendors and ensure connectivity,functionality and interoperability of IP building blocks.Stand

123、ards in theelectronic design industry can be established by formal accredited organizations,industry consortia,company licensing made available to all,defacto usage,or through open source licensing.In our Design Automation segment,our EDA products support many standards,including the most commonly u

124、sed hardware descriptionlanguages:SystemVerilog,Verilog,VHDL and SystemC.Our products utilize numerous industry-standard data formats,APIs and databases forthe exchange of design data among our tools,other EDA vendors products and applications that customers develop internally.In our Design IP segme

125、nt,we comply with a wide range of industry standards within our IP product family to ensure usability andinterconnectivity.In our Software Integrity segment,our solutions support several existing and emerging industry standards for software coding and security,suchas the Motor Industry Software Reli

126、ability Association coding standards for the automotive industry.In addition,our products support multiplemajor programming languages,including C/C+,Objective C,C#,JavaScript(including many commonly used frameworks),and others.Inaddition,we support many common compilers,development environments,fram

127、eworks,and data and file formats.Sales and DistributionOur Design Automation and Design IP segment customers are primarily semiconductor and electronics systems companies.The customers forproducts in our Software Integrity segment include many of these companies as well as companies from a wider arr

128、ay of industries,includingelectronics,financial services,automotive,medicine,energy and industrials.We market our products and services principally through direct sales in the United States and our principal foreign markets.Our SoftwareIntegrity segment continues to grow its indirect sales partner p

129、rogram,enabling our Software Integrity segment to engage geographies beyondthe reach of our direct sales force and opening opportunities in targeted vertical markets.We typically distribute our software products anddocumentation to customers electronically,but provide physical media(e.g.,DVD-ROMs)wh

130、en requested by the customer.We maintain sales and support centers throughout the United States.Outside the United States,we maintain sales,support or service offices inCanada,multiple countries in Europe,Israel and throughout Asia,including Japan,China,Korea,India and Taiwan.Our offices are further

131、described under Part I,Item 2,Properties of this Annual Report on Form 10-K.Information relating to domestic and foreign operations,including revenue and long-lived assets by geographic area,is contained in Part II,Item 8,Financial Statements and Supplementary Data of this Annual Report on Form 10-K

132、.Risks related to our foreign operations are describedin Part I,Item 1A,Risk Factors of this Annual Report on Form 10-K.9Table of ContentsRevenue Attributable to Product GroupsRevenue from our products and services is categorized into four groups:EDA,which includes digital and custom IC design softw

133、are,verification hardware and software products,manufacturing-related designproducts,FPGA design software,AI driven EDA solutions,and professional services;Design IP,which includes our Synopsys IP portfolio;Software Integrity,which includes solutions that test software code for security vulnerabilit

134、ies and quality defects,as well as professionaland managed services;andOther,which includes university programs,optical products,mechatronic simulation,and the impact of gains and losses from foreigncurrency hedges.Revenue attributable to each of our four product groups is shown below as a percentag

135、e of our total revenue for those fiscal years.Aggregate revenue derived from one of our customers and its subsidiaries through multiple agreements accounted for 12.4%,11.7%and 10.6%of our total revenue in fiscal 2023,2022 and 2021,respectively.Product Sales and Licensing AgreementsWe typically licen

136、se our software to customers under non-exclusive license agreements that restrict use of our software to specified purposeswithin specified geographical areas.The majority of licenses to our EDA products are network licenses that allow a number of individual users toaccess the software on a defined

137、network,including,in some cases,regional or global networks.The majority of licenses to our SoftwareIntegrity products are capacity or user licenses that allow a number of users to access the software based on a specified number of teammembers or specified code-bases in a defined territory.License f

138、ees depend on the type of license,product mix,and number of copies of eachproduct licensed.For a full discussion of our software product offerings,see Part II,Item 7,Managements Discussion and Analysis of Financial Condition andResults of Operations of this Annual Report on Form 10-K.10Table of Cont

139、entsWe typically license Synopsys IP products under nonexclusive license agreements that provide usage rights for specific designs.Fees underthese licenses are typically charged on a per design basis plus,in some cases,royalties.See Note 2.Significant Accounting Policies and Basesof Presentation of

140、the Notes to Consolidated Financial Statements for further information.Our hardware products,which principally consist of our prototyping and emulation systems,are either sold or leased to our customers.Risksrelated to disruptions in our supply chain affecting our business are described in Part I,It

141、em 1A,Risk Factors of this Annual Report on Form 10-K.Our professional services team typically provides design consulting services to our customers under consulting agreements with statements ofwork specific to each project.CompetitionWithin our Design Automation segment,we compete against other EDA

142、 vendors and against our customers own design tools and internaldesign capabilities.The EDA industry is highly competitive.In general,we compete principally on technology leadership,product quality andfeatures(including ease-of-use),license terms,price and payment terms,post-contract customer suppor

143、t,flexibility of tool use,andinteroperability with our own and other vendors products.We also deliver a significant amount of engineering and design consulting for ourproducts.No single factor drives an EDA customers buying decision,and we compete on all fronts to capture a higher portion of our cus

144、tomersbudgets.Our competitors include EDA vendors that offer varying ranges of products and services,such as Cadence Design Systems,Inc.andSiemens EDA.We also compete with other EDA vendors,including new entrants to the marketplace,that offer products focused on one or morediscrete phases of the IC

145、design process,as well as with customers internally developed design tools and capabilities.Within our Design IP segment,Synopsys competes against numerous other IP providers,including Cadence Design Systems,Inc.,and ourcustomers internally developed IP.We generally compete on the basis of product q

146、uality,reliability,features,availability of titles for newmanufacturing processes,ease of integration with customer designs,compatibility with design tools,license terms,price and payment terms,and customer support.Our Software Integrity segment competes with numerous solution providers,many of whic

147、h focus on specific aspects of software security orquality analysis.We also compete with frequent new entrants,which include start-up companies and more established software companies.Forexample,competitors named in the Gartner Magic Quadrant for Application Security Testing include Checkmarx Ltd.,V

148、eracode,Inc.,Open TextCorporation,GitHub,Inc.and Snyk Ltd.Risks related to competitive factors affecting our business are described in Part I,Item 1A,Risk Factors of this Annual Report on Form 10-K.Proprietary RightsWe primarily rely upon a combination of copyright,patent,trademark,and trade secret

149、laws and license and non-disclosure agreements toestablish and protect our proprietary rights.We have a diversified portfolio of more than 3,300 United States and foreign patents issued,and wewill continue to pursue additional patents in the future.Our issued patents have expiration dates through 20

150、44 and generally have a term oftwenty years from filing.Our patents primarily relate to our products and the technology used in connection with our products.Our source code isprotected both as a trade secret and as an unpublished copyrighted work.However,third parties may independently develop simil

151、ar technology.In addition,effective copyright and trade secret protection may be unavailable or limited in some foreign countries.While protecting ourproprietary technology is important to our success,our business as a whole is not significantly dependent upon any single patent,copyright,trademark,o

152、r license.In many cases,under our customer agreements and other license agreements,we offer to indemnify our customers if the licensed productsinfringe on a third partys intellectual property rights.As a result,we may from time to time need to defend claims that our customers use of ourproducts infr

153、inges on these third-party rights.We license software and other intellectual property from third parties,including,in severalinstances,for inclusion in our products.Risks related to our use of third-party technology are described in Part I,Item 1A,Risk Factors of thisAnnual Report on Form 10-K.Envir

154、onment,Social and Governance MattersAt Synopsys,our Smart Future Environment,Social and Governance(ESG)strategy provides a framework for how we manage our ownoperational impact on the world and our ability to influence others to do the same,as we11Table of Contentsbelieve this approach supports the

155、success of the business.We leverage our strategy and our corporate governance processes to assess andmanage the ESG matters that are relevant to our business as part of our efforts to operate in a sustainable manner.We aim to influence positive social and environmental change across our ecosystem by

156、 applying our resources,competencies,and team-basedproblem-solving approach.Our technology is in action in countless ways,from bringing safety and security to the driverless car revolution toenabling the technologies that are an increasingly vital component of protecting human health and well-being.

157、The Corporate Governance and Nominating Committee of our Board of Directors is responsible for overseeing policies;practices;priority andrisk assessments;risk management initiatives,goals and progress toward goals;and public disclosures relating to ESG matters,except to theextent delegated to other

158、committees of our Board of Directors,such as matters related to human capital management and diversity,equity andinclusion.Additional information about our approach to our ESG priorities is available on our ESG website,including our Environmental Policy and ourESG Report.The contents of our website

159、and ESG Report are referenced for general information only and are not incorporated into this AnnualReport on Form 10-K.Human Capital ResourcesAt Synopsys,we are committed to empowering our employees to pursue their passion,challenge themselves and their peers,and make theirmark on the world.We beli

160、eve this creates value for us,our stockholders,and the lives of the people we impact every day.Our commitment toattracting,developing and retaining top talent makes this goal possible and our constant pursuit of improving our employees experiencepromotes a culture where employees can thrive in their

161、 career.As of our fiscal 2023 year-end,Synopsys had approximately 20,300 employees,with approximately 24%in the United States and 76%in other locations around the world.Approximately 80%of our employees are engineers,and over half of those employees hold Masters or PhD degrees.The human capital meas

162、ures and objectives that we focus on includerecruitment and retention;diversity,equity and inclusion;total rewards;employee health,safety,and wellbeing;employee engagement anddevelopment;and succession planning.Risks related to our human capital are described in Part I,Item 1A,Risk Factors of this A

163、nnual Report on Form 10-K.Recruitment and RetentionOur workforce is representative of the industry we serve.In fiscal 2023,we increased our employee headcount by approximately 7%,with acontinued focus on promoting gender diversity with respect to those in technical and senior level positions and ens

164、uring a vibrant talent pipelinewith early career hiring and investment in training and development.As of our fiscal 2023 year-end,our undesired turnover rate was 2.7%.Weattribute the strong retention of our talented workforce to a number of factors,including exciting and challenging assignments;grow

165、thopportunities;strong leadership and management;a culture of integrity;our commitment to diversity,equity and inclusion;competitive andequitable compensation and benefits;our leading products and technology;and the strength of our customer relationships.Diversity,Equity and InclusionWe seek to inte

166、grate diversity,equity and inclusion into our corporate values at every levelfrom our foundation of integrity to our executionexcellence and from our dedicated leadership to our united passion for a better tomorrow.We strive to maintain a culture that values differentperspectives and backgrounds,whe

167、re everyone is treated with respect for who they are,and where people feel a sense of belonging.Webelieve this is not only essential for our success as a global leader in innovation,but also for the success of our employees in their own careers.We value the diversity of our teams,talent pipelines an

168、d pay and development programs,with a goal to ensure inclusive,equitable practices.Wecarefully study retention trends and feedback from diverse groups to identify areas where we can improve.We calculate undesired turnover rate by dividing the number of undesired exits from Synopsys by the average he

169、adcount for fiscal 2023,andwe define undesired turnover as exits by high-performing employees who resigned from Synopsys(or its subsidiaries)to pursue other workopportunities.Undesired turnover does not include employees with low performance,mutual resignations,or resignations due to personalreasons

170、(e.g.,retirement or returning to school).1112Table of ContentsAs of our fiscal 2023 year-end:Women comprised 25.4%of our global workforce;Women in senior level positions comprised 13.1%of all senior level positions at the company;andU.S.Black,Latinx,and Indigenous persons comprised 5.8%of our U.S.wo

171、rkforce.We provide training designed to encourage equitable and inclusive behavior to attract,retain and develop our workforce.In addition,ourEmployee Resource Groups,which are vital to our Synopsys community,host events and implement actions to attract and engage diverse talentand foster an inclusi

172、ve workplace.In fiscal 2023,we included workforce metrics such as diversity,employee retention and employee engagement as incentive plan goals for ourexecutive officers to advance key diversity and human capital initiatives.We believe these initiatives help to ensure that we continue to seek outstro

173、ng,diverse,qualified candidates,and that we develop and retain key talent.Total RewardsOur Total Rewards are designed to offer meaningful benefits and compensation for the time,energy,commitment,skills,and expertiseemployees bring to the company every day.We have practices in place that are intended

174、 to deliver fair and equitable compensation foremployees based on their contribution and performance.We benchmark market practices and regularly review our compensation and benefitsagainst the market to help ensure that it is competitive.We also offer a comprehensive set of benefits for employees an

175、d their families,focusedon physical,mental and financial health and wellbeing.Our compensation and benefit programs are tailored to the various geographies in whichwe operate,and for eligible employees may include:Market-competitive salary and cash bonus opportunity;Employee Stock Purchase Plan;Equi

176、ty compensation;Robust medical,dental,vision,and wellness benefits;Comprehensive leave plans;Life insurance options;Retirement plans and associated benefits;Financial planning tools and employee assistance plans;Student loan repayment assistance;Cancer-specific prevention,early detection,treatment a

177、nd support programs;andParental resources and adoption benefits.Health,Safety and WellbeingOur commitment to health,safety,and wellness was underscored this year by the support and resources we offered to help employees thrive ina hybrid work environment while balancing their personal lives.Through

178、our Stronger Through Wellbeing campaign,our leaders and managersare encouraged to model the importance of health and wellbeing,and many create opportunities to engage in wellness-related activities as ateam.We also offer a variety of programs and resources at no cost to employees and their family me

179、mbers to support their mental,emotional,and financial wellbeing.Employee EngagementWe have a comprehensive employee feedback program,and we use the feedback to gain an understanding of the employee experience and tomake improvements in a variety of areasfrom how we interact with customers to how we

180、share best practices,and more.Through our semi-annual SHAPE Synopsys surveys,we obtain employee insight into our values,manager effectiveness,ability to innovate,perceptions ondiversity,inclusion and belonging,13Table of Contentsand other critical factors.We also use the surveys to create space for

181、important conversations about who we are,where we are going,and howwe can connect with each other and our work.Approximately 94%of our employees participated in our SHAPE survey in May 2023.We received an engagement score of 82,which iscalculated by computing the average score set to a 100-point sca

182、le,for all employee responses to the questions pertaining to employeesatisfaction and job satisfaction.These results demonstrate Synopsys stability,resiliency,and a global workforce that is highly engaged.We sawstrong scores from our employees regarding their connection to our culture,their personal

183、 investment in Synopsys strategies and objectives,and their teams ability to innovate.As we grow,we aspire to maintain our results-oriented culture by balancing productivity with smartinvestments in our employees development,while also supporting individual wellbeingtwo key drivers of the overall em

184、ployee experience.We believe ongoing performance feedback encourages greater engagement in our business and improved individual performance.Each year,our employees participate in our performance development process that summarizes key accomplishments for the preceding year,establishesnew stretch goa

185、ls,and identifies critical capabilities for development.As part of this process,we encourage managers to solicit and sharesupportive multi-rater feedback,further strengthening the focus on teamwork and team success.Talent Development and Succession PlanningWe offer several programs to support the ca

186、reer advancement of our employees.Through our digital learning platform,we foster and support an“always learning”culture where employees can access training,external articles,videos,and blogs.In addition,we host a series of in-personand on-demand learning sessions designed to build capability and ad

187、aptability required for the future.As employees advance in their careers,our training framework is intended to build new capabilities on established foundational skills.Based upon the belief that our employees deserve great managers,our management training is designed to increase capability in the a

188、reas ofcommunication,engagement,coaching,diversity,equity,and inclusion,hiring and on-boarding,and business skills and help promote an ethicaland supportive work environment free from bias and harassment.In fiscal 2023,we introduced a new leadership training,and focused onhelping our many managers t

189、hrive in connecting team work to company priorities while giving them the tools to be great coaches and leaders.Inaddition,our regions and business teams customize development programs for their specific needs.Information about our Executive OfficersThe executive officers of Synopsys and their ages

190、as of December 12,2023 were as follows:NameAgePositionAart J.de Geus69Chief Executive Officer and Chair of the Board of DirectorsSassine Ghazi53President and Chief Operating OfficerShelagh Glaser59Chief Financial OfficerRichard Mahoney61Chief Revenue OfficerJohn F.Runkel,Jr.68General Counsel and Cor

191、porate SecretaryAart J.de Geus co-founded Synopsys and has served as Chair of our Board of Directors since February 1998 and Chief Executive Officer sinceJanuary 1994.He served as Co-Chief Executive Officer with Dr.Chi-Foon Chan from May 2012 until April 2022.Effective January 1,2024,Dr.de Geus will

192、 transition into the role of Executive Chair of our Board of Directors.Since the inception of Synopsys in December 1986,Dr.de Geushas held a variety of positions,including President,Senior Vice President of Engineering and Senior Vice President of Marketing.He has servedas a member of our Board of D

193、irectors since 1986,and as Chair of our Board of Directors from 1986 to 1992 and again from 1998 until hisupcoming transition to Executive Chair on January 1,2024.Dr.de Geus has also served on the board of directors of Applied Materials,Inc.sinceJuly 2007.Dr.de Geus holds an M.S.E.E.from the Swiss F

194、ederal Institute of Technology in Lausanne,Switzerland and a Ph.D.in ElectricalEngineering from Southern Methodist University.Sassine Ghazi has served as our Chief Operating Officer since August 2020,became our President in November 2021 and joined our Board ofDirectors in August 2023.Effective Janu

195、ary 1,2024,Mr.Ghazi will assume the role of President and Chief Executive Officer.Mr.Ghazi joinedSynopsys in March 1998 as an Application Engineer and served as General Manager of the Design Group.Prior to joining Synopsys,Mr.Ghaziwas a design engineer at Intel Corporation.Mr.Ghazi received his bach

196、elors degree in Business Administration from Lebanese American14Table of ContentsUniversity;a B.S.E.E from the Georgia Institute of Technology in 1993;and an M.S.E.E.from the University of Tennessee in 1995.Shelagh Glaser has served as our Chief Financial Officer since December 2022.Prior to joining

197、 Synopsys,Ms.Glaser served as Chief FinancialOfficer of Zendesk,Inc.from May 2021 to November 2022.Ms.Glaser previously served in senior finance roles at Intel Corporation,amultinational technology company,including serving as its Corporate Vice President and Chief Financial Officer and Chief Operat

198、ing Officer forits Data Platform Group from July 2019 to May 2021 and serving as its Corporate Vice President and Chief Financial Officer and in various othersenior roles in its Client Computing Group from December 2013 to July 2019.Ms.Glaser has served as a director and member of the AuditCommittee

199、 at PubMatic,Inc.since June 2022.Ms.Glaser holds a B.A.in Economics from the University of Michigan and an M.B.A.in Financefrom Carnegie Mellon University.Richard Mahoney has served as our Chief Revenue Officer since November 2022.Mr.Mahoney joined Synopsys as a Special Projects Advisorin May 2022.P

200、rior to joining Synopsys,Mr.Mahoney held several senior management positions with Ansys,Inc.from 2016 to 2022,includingmost recently as Senior Vice President of Worldwide Sales,Marketing and Customer Excellence from December 2016 to May 2022.Prior tojoining Ansys,from 2014 to 2016,Mr.Mahoney was Sen

201、ior Vice President,Design Enablement and International Sales,at Global Foundries,asemiconductor manufacturing company.Mr.Mahoney holds an A.S.in Computer Science from the Maxwell Institute of Technology.John F.Runkel,Jr.has served as our General Counsel and Corporate Secretary since May 2014.From Oc

202、tober 2008 to March 2013,he wasExecutive Vice President,General Counsel,and Corporate Secretary of Affymetrix,Inc.He served as Senior Vice President,General Counseland Corporate Secretary of Intuitive Surgical,Inc.from 2006 to 2007.Mr.Runkel served in several roles at VISX,Inc.from 2001 to 2005,most

203、recently as Senior Vice President of Business Development and General Counsel.Mr.Runkel was also a partner at the law firm of Sheppard,Mullin,Richter&Hampton LLP for 11 years.Mr.Runkel holds a Bachelor of Arts and a Juris Doctorate from the University of California,LosAngeles.There are no family rel

204、ationships among any Synopsys executive officers or directors.15Table of Contents Item 1A.Risk FactorsA description of the risk factors associated with our business is set forth below.Some of these risks are highlighted in the following discussion,and in Managements Discussion and Analysis of Financ

205、ial Condition and Results of Operations,Legal Proceedings,and Quantitative andQualitative Disclosures About Market Risk.The occurrence of any of these risks or additional risks and uncertainties not presently known to us orthat we currently believe to be immaterial could materially and adversely aff

206、ect our business,operating results,financial condition,and stockprice.These risks and uncertainties could cause our actual results to differ materially from the results contemplated by the forward-lookingstatements contained in this report.Investors should carefully consider all relevant risks and u

207、ncertainties before investing in our common stock.Industry RisksUncertainty in the macroeconomic environment,and its potential impact on the semiconductor and electronics industries,maynegatively affect our business,operating results and financial condition.Uncertainty in the macroeconomic environme

208、nt,including the effects of,among other things,increased global inflationary pressures and interestrates,potential economic slowdowns or recessions,supply chain disruptions,geopolitical pressures,fluctuations in foreign exchange rates andassociated global economic conditions have resulted in volatil

209、ity in credit,equity and foreign currency markets.This uncertain macroeconomicenvironment could lead some of our customers to postpone their decision-making,decrease their spending and/or delay their payments to us.Such caution by customers could,among other things,limit our ability to maintain or i

210、ncrease our sales or recognize revenue from committedcontracts.For example,we continue to experience an impact from the current macroeconomic environment in our Software Integrity segment as customershave applied elevated levels of scrutiny to purchasing decisions due in part to their own budget unc

211、ertainty,which has,in some cases,affectedcustomer order size,pricing and/or contract duration.On November 29,2023,we announced that we have decided to explore strategicalternatives for our Software Integrity segment.As a part of this process,our management is considering a full range of strategic op

212、portunities.At this time we cannot predict the impact that such strategic alternatives might have on our business,operations or financial condition.Thisannouncement and uncertainty could have a number of negative effects on our current business,including potentially disrupting our regularoperations,

213、diverting the attention of our workforce and management team and increasing undesired workforce turnover.It could also disruptexisting business relationships,make it harder to develop new business relationships,or otherwise negatively impact the way that we operateour business,which could negatively

214、 impact our business,operating results or financial condition.If these macroeconomic uncertainties persist and economic conditions continue to deteriorate,then the semiconductor and electronics industriescould fail to grow.Additionally,uncertain macroeconomic conditions could also have the effect of

215、 increasing other risks and uncertainties facingour business,which could have a material adverse effect on our operating results and financial condition.Such risks that may be heightened byuncertain macroeconomic conditions could include Chinas stated policy of becoming a global leader in the semico

216、nductor industry may lead toincreased competition or further disruption of international trade relationships,including,but not limited to,additional government traderestrictions.For more on risks related to government export and import restrictions such as the U.S.governments Entity List and ExportR

217、egulations(as defined below),see“Industry Risks We are subject to governmental export and import requirements that could subject us toliability and restrict our ability to sell our products and services,which could impair our ability to compete in international markets.”Adverse economic conditions a

218、ffect demand for devices that our products help create,such as the ICs incorporated in personal computers,smartphones,automobiles and servers.Longer-term reduced demand for these or other products could result in reduced demand for designsolutions and significant decreases in our average selling pri

219、ces and product sales over time.Future economic downturns could also adverselyaffect our business,operating results and financial condition.In addition,if our customers or distributors build elevated inventory levels,we couldexperience a decrease in short-term and/or long-term demand for our product

220、s.If any of these events or disruptions were to occur,the demandfor our products and services could be adversely affected along with our business,operating results and financial condition.Further,the negativeimpact of these events or disruptions may be deferred due to our business model.Further econ

221、omic instability could also adversely affect the banking and financial services industry and result in bank failures or creditdowngrades of the banks we rely on for foreign currency forward contracts,credit and banking transactions,and deposit services,or cause themto default on their obligations.Ad

222、ditionally,the banking16Table of Contentsand financial services industries are subject to complex laws and are heavily regulated.There is uncertainty regarding how proposed,contemplated or future changes to the laws,policies and regulations governing our industry,the banking and financial services i

223、ndustry and theeconomy could affect our business,including increased global interest rates and global inflationary pressure.A deterioration of conditions inworldwide credit markets could limit our ability to obtain external financing to fund our operations and capital expenditures.In addition,diffic

224、ulteconomic conditions may also result in a higher rate of losses on our accounts receivable due to credit defaults.Any of the foregoing couldcause adverse effects on our business,operating results and financial condition,and could cause our stock price to decline.The growth of our business depends

225、primarily on the semiconductor and electronics industries.The growth of the EDA industry as a whole,sales in our Design Automation and Design IP segments,and,to some extent,our Software Integritysegment sales are dependent on the semiconductor and electronics industries.A substantial portion of our

226、business and revenue depends uponthe commencement of new design projects by semiconductor manufacturers,systems companies and their customers.The increasingcomplexity of designs of SoCs,ICs,electronic systems and customers concerns about managing costs have previously led to,and in the futurecould l

227、ead to,a decrease in design starts and design activity in general.For example,in response to this increasing complexity,some customersmay choose to focus on one discrete phase of the design process or opt for less advanced,but less risky,manufacturing processes that may notrequire the most advanced

228、EDA products.Demand for our products and services could decrease and our business,financial condition andoperating results could be adversely affected if growth in the semiconductor and electronics industries slows or stalls,including due to increasedglobal inflationary pressures and interest rates,

229、a continued or worsening global supply chain disruption,geopolitical pressures or economicslowdowns or recessions.Additionally,as the EDA industry has matured,consolidation has resulted in stronger competition from companiesbetter able to compete as sole source vendors.This increased competition may

230、 cause our revenue growth rate to decline and exert downwardpressure on our operating margins,which would have an adverse effect on our business and financial condition.Furthermore,the semiconductor and electronics industries have become increasingly complex and interconnected ecosystems.Many of our

231、customers outsource the manufacturing of their semiconductor designs to foundries.Our customers also frequently incorporate third-party IP,whether provided by us or other vendors,into their designs to improve the efficiency of their design process.We work closely with majorfoundries to ensure that o

232、ur EDA,IP and manufacturing solutions are compatible with their manufacturing processes.Similarly,we work closelywith other major providers of semiconductor IP,particularly microprocessor IP,to optimize our EDA tools for use with their IP designs and toassure that their IP and our own IP products wo

233、rk effectively together,as we may each provide for the design of separate components on thesame chip.If we fail to optimize our EDA and IP solutions for use with major foundries manufacturing processes or major IP providers products,or if our access to such foundry processes or third-party IP produc

234、ts is hampered,then our solutions may become less desirable to ourcustomers,resulting in an adverse effect on our business and financial condition.We operate in highly competitive industries,and if we do not continue to meet our customers demand for innovative technology atlower costs,our products m

235、ay not be competitive or may become obsolete.In our Design Automation segment,we compete against EDA vendors that offer a variety of products and services,such as Cadence DesignSystems,Inc.and Siemens EDA.We also compete with other EDA vendors,including new entrants to the marketplace,that offer pro

236、ductsfocused on one or more discrete phases of the IC design process.Moreover,our customers internally develop design tools and capabilities thatcompete with our products.In our Design IP segment,we compete against a growing number of silicon IP providers as well as our customersinternally developed

237、 IP.In our Software Integrity segment,we compete with other solution providers,many of which focus on specific aspects ofsoftware security or quality analysis.We also compete with frequent new entrants,which include start-up companies and more establishedsoftware companies.The industries in which we

238、 operate are highly competitive,with new competitors entering these markets both domestically and internationally.For example,China has implemented national policies favoring Chinese companies and has formed government-backed investment funds as itseeks to build independent EDA capabilities and comp

239、ete internationally in the semiconductor industry.The demand for our products andservices is dynamic and depends on a number of factors,including,among other things,demand for our customers products,design starts andour customers budgetary constraints.Technology in these industries evolves rapidly a

240、nd is characterized by frequent product introductions andimprovements as well as changes in industry standards and customer requirements.For example,the adoption of cloud computing and artificialintelligence(AI)technologies can bring new demand and also challenges in terms of disruption to both busi

241、ness models and our existingtechnology17Table of Contentsofferings.Our efforts in developing such new technology solutions,including,for example,our current efforts in creating cloud computing and AIsolutions,may not succeed.Semiconductor device functionality requirements continually increase while

242、feature widths decrease,whichsubstantially increases the complexity,cost and risk of chip design and manufacturing.At the same time,our customers and potential customerscontinue to demand a lower total cost of design,which can lead to the consolidation of their purchases from one vendor.In order to

243、succeed inthis environment,we must successfully meet our customers technology requirements and increase the value of our products,while also strivingto reduce their overall costs and our own operating costs.We compete principally on the basis of technology,product quality and features(including ease

244、-of-use),license or usage terms,post-contractcustomer support,interoperability among products,and price and payment terms.Specifically,we believe the following competitive factors affectour success:Our ability to anticipate and lead critical development cycles and technological shifts,innovate rapid

245、ly and efficiently,improveour existing software and hardware products,and successfully develop or acquire such new products;Our ability to offer products that provide both a high level of integration into a comprehensive platform and a high level ofindividual product performance;Our ability to enhan

246、ce the value of our offerings through more favorable terms such as expanded license usage,future purchaserights,price discounts and other differentiating rights,such as multiple tool copies,post-contract customer support,“re-mix”rights that allow customers to exchange the software they initially lic

247、ensed for other Synopsys products,and the ability topurchase pools of technology;Our ability to manage an efficient supply chain to ensure hardware product availability;Our ability to compete on the basis of payment terms;andOur ability to provide engineering and design consulting for our products.I

248、f we fail to successfully manage any of these competitive factors,fail to successfully balance the conflicting demands for innovative technologyand lower overall costs,or fail to address new competitive forces,our business,operating results and financial condition will be adverselyaffected.We are su

249、bject to governmental export and import requirements that could subject us to liability and restrict our ability to sell ourproducts and services,which could impair our ability to compete in international markets.We are subject to export controls,laws and regulations that restrict selling,shipping o

250、r transmitting certain of our products and services andtransferring certain of our technology outside the United States.These requirements also restrict domestic release of software and technology tocertain foreign nationals.In addition,we are subject to customs and other import requirements that re

251、gulate imports that may be important forour business.If we fail to comply with the U.S.Export Administration Regulations or other U.S.or non-U.S.export requirements(collectively,the ExportRegulations),we could be subject to substantial civil and criminal penalties,including fines for the company and

252、 the possible loss of the ability toengage in exporting and other international transactions.Due to the nature of our business and technology,the Export Regulations may alsosubject us to governmental inquiries regarding transactions between us and certain foreign entities.For example,we have receive

253、dadministrative subpoenas from the U.S.Bureau of Industry and Security(the BIS)requesting production of information and documentationrelating to transactions with certain Chinese entities.We believe that we are in full compliance with all applicable regulations and are workingwith the BIS to respond

254、 to its subpoenas.However,we cannot predict the outcome of the inquiries or their potential effect on our operations orfinancial condition.We believe that the Export Regulations do not materially impact our business at this time,but we cannot predict the impact that additionalregulatory changes may

255、have on our business in the future.The United States has published significant changes to the Export Regulations withrespect to Russia and China,and we anticipate additional changes to the Export Regulations in the future.For example,the United Statesgovernment has implemented controls on advanced c

256、omputing ICs,computer commodities that contain such ICs,and certain semiconductormanufacturing items,as well as controls on transactions involving items for supercomputer and semiconductor manufacturing end-users.Thecontrols expand the scope of foreign-produced items subject to license requirements

257、for certain entities on the U.S.governments Entity List.Future changes to the Export Regulations,including18Table of Contentschanges in the enforcement and scope of such regulations,may create delays in the introduction of our products or services in internationalmarkets or could prevent our custome

258、rs with international operations from deploying our products or services globally.In some cases,suchchanges could prevent the export or import of our products.Consolidation among our customers and within the industries in which we operate,as well as our dependence on a relatively smallnumber of larg

259、e customers,may negatively impact our operating results.A number of business combinations and strategic partnerships among our customers in the semiconductor and electronics industries haveoccurred over the last several years,and more could occur in the future.Consolidation among our customers could

260、 lead to fewer customers orthe loss of customers,increased customer bargaining power or reduced customer spending on software and services.Further,we depend on arelatively small number of large customers,and on such customers continuing to renew licenses and purchase additional products from us,for

261、alarge portion of our revenues.Consolidation among our customers could also reduce demand for our products and services if customersstreamline research and development or operations,or reduce or delay purchasing decisions.Reduced customer spending or the loss ofcustomers,particularly our large custo

262、mers,could adversely affect our business,operating results and financial condition.In addition,we and our competitors may acquire businesses and technologies to complement and expand our respective product offerings.Consolidated competitors could have considerable financial resources and channel inf

263、luence as well as broad geographic reach,which mayenable them to be more competitive in,among other things,product differentiation,breadth of technology portfolio,pricing,marketing,servicesor support.Such consolidations or acquisitions could negatively impact our business,operating results and finan

264、cial condition.Business Operations RisksThe global nature of our operations exposes us to increased risks and compliance obligations.We derive roughly half of our revenue from sales outside the United States,and we expect our orders and revenue to continue to depend onsales to customers outside the

265、U.S.We have also continually expanded our non-U.S.operations.This strategy requires us to recruit and retainqualified technical and managerial employees,manage multiple remote locations performing complex software development projects,andensure intellectual property protection outside of the U.S.Our

266、 international operations and sales subject us to a number of increased risks,including:Economic slowdowns,recessions or uncertainty in financial markets,including,among other things,the impact of increasedglobal inflationary pressures and interest rates;Uncertain economic,legal and political condit

267、ions in China,Europe and other regions where we do business,including,forexample,changes in China-Taiwan relations,regional or global military conflicts,and related sanctions and financial penaltiesimposed on participants in such conflicts;Government trade restrictions,including tariffs,export contr

268、ols or other trade barriers,and changes to existing tradearrangements,including the unknown impact of current and future U.S.and Chinese trade regulations;Ineffective or weaker legal protection of intellectual property rights;Difficulties in adapting to cultural differences in the conduct of busines

269、s,which may include business practices in which we areprohibited from engaging by the Foreign Corrupt Practices Act or other anti-corruption laws;Financial risks such as longer payment cycles,changes in currency exchange rates and difficulty in collecting accountsreceivable;Inadequate local infrastr

270、ucture that could result in business disruptions;Additional taxes,interest and potential penalties and uncertainty around changes in tax laws of various countries;andOther factors beyond our control such as natural disasters,terrorism,civil unrest,war and infectious diseases and pandemics,such as th

271、e COVID-19 pandemic.19Table of ContentsFurthermore,if any of the foreign economies in which we do business deteriorate or if we fail to effectively manage our global operations,ourbusiness and operating results will be harmed.There is inherent risk,based on the complex relationships between certain

272、Asian countries such as China,where we derive a growingpercentage of our revenue,and the United States,that political,diplomatic or military events could result in trade disruptions,including tariffs,trade embargoes,export restrictions and other trade barriers.A significant trade disruption,export r

273、estriction,or the establishment or increase ofany trade barrier in any area where we do business could reduce customer demand and cause customers to search for substitute products andservices,make our products and services more expensive or unavailable for customers,increase the cost of our products

274、 and services,have anegative impact on customer confidence and spending,make our products less competitive,or otherwise have a materially adverse impact onour backlog,future revenue and profits,our customers and suppliers business,operating results and financial condition.For example and asdescribed

275、 above,the ongoing geopolitical and economic uncertainty between the U.S.and China,the unknown impact of current and future U.S.and Chinese trade regulations,and other geopolitical risks with respect to China and Taiwan may cause disruptions in the markets and industrieswe serve and our supply chain

276、,decreased demand from customers for products using our solutions or other disruptions,which could,directly orindirectly,materially harm our business,operating results and financial condition.For more on risks related to government export and importrestrictions such as the U.S.governments Entity Lis

277、t and the Export Regulations see“Industry Risks We are subject to governmental exportand import requirements that could subject us to liability and restrict our ability to sell our products and services,which could impair our ability tocompete in international markets.”In response to the U.S.adoptin

278、g tariffs and trade barriers or taking other actions,other countries may also adopt tariffs and trade barriers thatcould limit our ability to offer our products and services.Current and potential customers who are concerned or affected by such tariffs orrestrictions may respond by developing their o

279、wn products or replacing our solutions,which would have an adverse effect on our business.Inaddition,government or customer efforts,attitudes,laws or policies regarding technology independence may lead to non-U.S.customersfavoring their domestic technology solutions that could compete with or replac

280、e our products,which would also have an adverse effect on ourbusiness.In addition to tariffs and other trade barriers,our global operations are subject to numerous U.S.and foreign laws and regulations such as thoserelated to anti-corruption,tax,corporate governance,imports and exports,financial and

281、other disclosures,privacy and labor relations.Theselaws and regulations are complex and may have differing or conflicting legal standards,making compliance difficult and costly.In addition,thereis uncertainty regarding how proposed,contemplated or future changes to these complex laws and regulations

282、 could affect our business.Wemay incur substantial expense in complying with the new obligations to be imposed by these laws and regulations,and we may be required tomake significant changes in our business operations,all of which may adversely affect our revenues and our business overall.If we viol

283、ate theselaws and regulations,we could be subject to fines,penalties or criminal sanctions,and may be prohibited from conducting business in one ormore countries.Any violation individually or in the aggregate could have a material adverse effect on our operations and financial condition.Our financia

284、l results are also affected by fluctuations in foreign currency exchange rates.A weakening U.S.dollar relative to other currenciesincreases expenses of our foreign subsidiaries when they are translated into U.S.dollars in our consolidated statements of income.Likewise,astrengthening U.S.dollar relat

285、ive to other currencies,including the renminbi or Yen,reduces revenue of our foreign subsidiaries upon translationand consolidation.Exchange rates are subject to significant and rapid fluctuations due to a number of factors,including interest rate changesand political and economic uncertainty.Theref

286、ore,we cannot predict the prospective impact of exchange rate fluctuations.We may be unable tohedge all of our foreign currency risk,which could have a negative impact on our operating results.Our operating results may fluctuate in the future,which may adversely affect our stock price.Our operating

287、results are subject to quarterly and annual fluctuations,which may adversely affect our stock price.Our historical results shouldnot be viewed as indicative of our future performance due to these periodic fluctuations.20Table of ContentsMany factors may cause our backlog,revenue or earnings to fluct

288、uate,including,among other things:Changes in demand for our productsespecially products,such as hardware,generating upfront revenuedue to fluctuationsin demand for our customers products and due to constraints in our customers budgets for research and development and EDAproducts and services;Changes

289、 in demand for our products due to customers reducing their expenditures,whether as a cost-cutting measure or aresult of their insolvency or bankruptcy,and whether due to increased global inflationary pressures and interest rates and asustained global semiconductor shortage or other reasons;Product

290、competition in the EDA industry,which can change rapidly due to industry or customer consolidation and technologicalinnovation;Our ability to innovate and introduce new products and services or effectively integrate products and technologies that weacquire;Failures or delays in completing sales due

291、to our lengthy sales cycle,which often includes a substantial customer evaluation andapproval process because of the complexity of our products and services;Our ability to implement effective cost control measures;Our dependence on a relatively small number of large customers,and on such customers c

292、ontinuing to renew licenses andpurchase additional products from us,for a large portion of our revenue;Changes to the amount,composition and valuation of,and any impairments to or write-offs of,our assets or strategicinvestments;Changes in the mix of our products sold,as increased sales of our produ

293、cts with lower gross margins,such as our hardwareproducts,may reduce our overall margins;Expenses related to our acquisition and integration of businesses and technologies;Changes in tax rules,as well as changes to our effective tax rate,including the tax effects of infrequent or unusual transaction

294、sand tax audit settlements;Delays,increased costs or quality issues resulting from our reliance on third parties to manufacture our hardware products,which includes a sole supplier for certain hardware components;Natural variability in the timing of IP drawdowns,which can be difficult to predict;Gen

295、eral economic and political conditions that affect the semiconductor and electronics industries,such as disruptions tointernational trade relationships,including tariffs,export licenses,or other trade barriers affecting our or our suppliers products;andChanges in accounting standards,which may impac

296、t the way we recognize our revenue and costs and impact our earnings.The timing of revenue recognition may also cause our revenue and earnings to fluctuate.The timing of revenue recognition is affected by factorsthat include:Cancellations or changes in levels of orders or the mix between upfront pro

297、ducts revenue and time-based products revenue;Delay of one or more orders for a particular period,particularly orders generating upfront products revenue,such as hardware;Delay in the completion of professional services projects that require significant modification or customization and are accounte

298、dfor using the percentage of completion method;Delay in the completion and delivery of IP products in development as to which customers have paid for early access;21Table of ContentsCustomer contract amendments or renewals that provide discounts or defer revenue to later periods;andThe levels of our

299、 hardware and IP revenues,which are recognized upfront and are primarily dependent upon our ability toprovide the latest technology and meet customer requirements.These factors,or any other factors or risks discussed herein,could negatively impact our backlog,revenue or earnings and cause our stockp

300、rice to decline.Additionally,our results may fail to meet or exceed the expectations of securities analysts and investors,or such analysts maychange their recommendation regarding our stock,which could cause our stock price to decline.Our stock price has been,and may continue tobe,volatile,which may

301、 make it more difficult for our stockholders to sell their shares at a time or a price that is favorable to them.Cybersecurity threats or other security breaches could compromise sensitive information belonging to us or our customers and couldharm our business and our reputation,particularly that of

302、 our security testing solutions.We store sensitive data,including intellectual property,our proprietary business information and that of our customers,and personal information,in our data centers,on our networks or on the cloud.In addition,our operations depend upon our information technology(IT)sys

303、tems.Wemaintain a variety of information security policies,procedures,and controls to protect our business and proprietary information,prevent data lossand other security breaches and incidents,keep our IT systems operational and reduce the impact of a security breach or incident,but thesesecurities

304、 measures cannot provide and have not provided absolute security.In the normal course of business,our systems are and have beenthe target of malicious cyber attack attempts and have been and may be subject to compromise due to employee error,malfeasance or otherdisruptions that have and could result

305、 in unauthorized disclosure or loss of sensitive information.To date,we have not identified material cybersecurity incidents or incurred any material expenses with any incidents.However,any breach or compromise could adversely impact ourbusiness and operations,expose us or our customers to litigatio

306、n,investigations,loss of data,increase costs,or result in loss of customerconfidence and damage to our reputation,any of which could adversely affect our business and our ability to sell our products and services.Industry incidences of cyberattacks and other cybersecurity breaches have increased and

307、 are likely to continue to increase.We are using anincreasing number of third-party software solutions,including cloud-based solutions,which increase potential threat vectors,such as byexploitation of misconfigurations or vulnerabilities.We also use third-party vendors that provide software or hardw

308、are,have access to ournetwork,and/or store sensitive data,and these third parties are subject to their own cybersecurity threats.Our standard vendor terms andconditions include provisions requiring the use of appropriate security measures to prevent unauthorized use or disclosure of our data,as well

309、 asother safeguards.Despite these measures,there is no guarantee that a compromise of our third-party vendors will not occur and in turn result ina compromise of our own IT systems or data.In addition,if we select a vendor that uses cloud storage as part of their service or productofferings,or if we

310、 are selected as a vendor for our cloud-based solutions,our proprietary information could be misappropriated by third partiesdespite our attempts to validate the security of such services.Many employees continue to work remotely based on a hybrid work model,whichmagnifies the importance of maintaini

311、ng the integrity of our remote access security measures.We also periodically acquire new businesses withless mature security programs,and it takes time to align their security practices to meet our information security policies,procedures andcontrols.The techniques used to obtain unauthorized access

312、 to networks or to sabotage systems of companies such as ours change frequently andgenerally are not recognized until launched against a target.We may be unable to anticipate these emerging techniques,react in a timelymanner,or implement adequate preventative measures,or we may not have sufficient l

313、ogging available to fully investigate the incident.Oursecurity measures vary in maturity across the business and may be and have been circumvented.For example,we have identified instanceswhere employees have used non-approved applications for business purposes,some of which do not meet our security

314、standards.In addition,we discovered unauthorized third-party access to our products and product license files hosted on our SolvNet Plus customer license andproduct delivery system in 2015.Any security breach of our own or a third-party vendors systems could cause us to be non-compliant withapplicab

315、le laws or regulations,subject us to legal claims or proceedings,disrupt our operations,damage our reputation,and cause a loss ofconfidence in our products and services,any of which could adversely affect our business and our ability to sell our products and services.Our software products,hosted sol

316、utions and software security and quality testing solutions are also targeted by hackers and may becompromised by,among other things,phishing,exploits of our code or our system configurations,malicious code(such as viruses and worms),distributed denial-of-service attacks,sophisticated22Table of Conte

317、ntsattacks conducted or sponsored by nation-states,advanced persistent threat intrusions,ransomware and other malware.We leverage manysecurity best practices throughout the software development lifecycle,but our security development practices vary in maturity across thebusiness and may not be effect

318、ive against all cybersecurity threats.Furthermore,due to geopolitical incidents,including regional militaryconflicts,state-supported and geopolitical-related cybersecurity incidents against companies such as ours may increase.Attacks on our productscould potentially disrupt the proper functioning of

319、 our software,cause errors in the output of our customers work,allow unauthorized access toour or our customers proprietary information or cause other destructive outcomes.We also offer software security and quality testing solutions.If we fail to identify new and increasingly sophisticated methods

320、of cyber attacks orfail to invest sufficient resources in research and development regarding new threat vectors,our security testing products and services may notdetect vulnerabilities in our customers software code.An actual or perceived failure to detect security flaws may negatively impact the pe

321、rceivedreliability of our security testing products and services,and could result in a loss of customers or sales,or an increased cost to remedy aproblem.Furthermore,our growth and recent acquisitions in the software security and quality testing space may increase our visibility as asecurity-focused

322、 company and may make us a more attractive target for attacks on our own IT infrastructure.As a result,we could experiencenegative publicity and our reputation could suffer,customers could stop buying our products,we could face lawsuits and potential liability,andour business,operating results and f

323、inancial condition could be negatively impacted.If we fail to protect our proprietary technology,our business will be harmed.Our success depends in part upon protecting our proprietary technology.Our efforts to protect our technology may be costly and unsuccessful.We rely on agreements with customer

324、s,employees and other third parties as well as intellectual property laws worldwide to protect ourproprietary technology.These agreements may be breached,and we may not have adequate remedies for any breach.Additionally,despite ourmeasures to prevent piracy,other parties may attempt to illegally cop

325、y or use our products,which could result in lost revenue if their efforts aresuccessful.Some foreign countries do not currently provide effective legal protection for intellectual property and our ability to prevent theunauthorized use of our products in those countries is therefore limited.Our trad

326、e secrets may also be stolen,otherwise become known,or beindependently developed by competitors.From time to time,we may need to commence litigation or other legal proceedings in order to assert claims of infringement of our intellectualproperty;defend our products from piracy;protect our trade secr

327、ets or know-how;or determine the enforceability,scope and validity of thepropriety rights of others.If we do not obtain or maintain appropriate patent,copyright or trade secret protection for any reason,or cannot fully defend our intellectualproperty rights in certain jurisdictions,our business and

328、operating results would be harmed.In addition,intellectual property litigation is lengthy,expensive and uncertain.Legal fees related to such litigation will increase our operating expenses and may reduce our net income.We may not be able to realize the potential financial or strategic benefits of th

329、e transactions we complete,or find suitable targetbusinesses and technology to acquire,which could hurt our ability to grow our business,develop new products or sell our productsand services.Acquisitions and strategic investments are an important part of our growth strategy.We have completed a signi

330、ficant number of acquisitions inrecent years.We expect to make additional acquisitions and strategic investments in the future,but we may not find suitable acquisition orinvestment targets,or we may not be able to consummate desired acquisitions or investments due to unfavorable credit markets,comme

331、rciallyunacceptable terms,failure to obtain regulatory approvals,competitive bid dynamics or other risks,which could harm our operating results.Acquisitions and strategic investments are difficult,time-consuming,and pose a number of risks,including,but not limited to:Potential negative impact on our

332、 earnings per share;Failure of acquired products to achieve projected sales;Problems in integrating the acquired products with our products;Difficulties entering into new markets in which we are not experienced or where competitors may have stronger positions;23Table of ContentsPotential downward pr

333、essure on operating margins due to lower operating margins of acquired businesses,increasedheadcount costs,and other expenses associated with adding and supporting new products;Difficulties in retaining and integrating key employees;Substantial reductions of our cash resources and/or the incurrence of debt,which may be at higher than anticipated interestrates;Failure to realize expected synergies